WEIli Holdings Limited — Proxy Solicitation & Information Statement 2014

Sep 24, 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Daiwa Associate Holdings Limited, you should at once hand this circular to the purchaser or the transferee, or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance on the whole or any part of the contents of this circular.

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DAIWA ASSOCIATE HOLDINGS LIMITED
台和商事控股有限公司
(Incorporated in Bermuda with limited liability)
(Stock code: 1037)
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MAJOR TRANSACTION DISPOSAL OF SUBSIDIARY

24 September 2014

• For identification purpose only

CONTENTS

		Page
Definitions.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6
Appendix I	— Financial information of the Group. . . . . . . . . . . . . . . . . . . .	15
Appendix II	— Valuation report on the Group’s interest in
	the Industrial Park. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Appendix III	— General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23

— i —

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

“1st Deposit”	R M B 5 , 0 0 0 , 0 0 0 ( e q u i v a l e n t t o a p p r o x i m a t e l y
	HK$6,220,000), being the deposit and part payment of
	the Consideration has been paid by the Purchaser to
	DAL (for itself and on behalf of Vendors) in cash upon
	signing of the MOU
“2nd Deposit”	R M B 2 0 , 0 0 0 , 0 0 0 ( e q u i v a l e n t t o a p p r o x i m a t e l y
	HK$25,193,000), being the deposit and part payment
	of the Consideration has been paid by the Purchaser to
	DAL (for itself and on behalf of Vendors) in cash upon
	signing of the Formal Agreement
“Advance Creative”	Advance Creative Technology Limited, a company
	incorporated in Hong Kong and a wholly owned
	subsidiary of the Company, one of the Vendors
“Board”	the board of Directors
“BVI”	British Virgin Islands
“Business Day”	a day (excluding Saturday and Sunday and any day on
	which a tropical cyclone warning No. 8 or above or on
	which a “black” rainstorm warning signal is hoisted or
	remains hoisted at 10:00 am) on which banks in Hong
	Kong are generally open for business in Hong Kong
	throughout their normal business hours
“Company”	Daiwa Associate Holdings Limited, an exempted
	company incorporated in Bermuda with limited liability,
	whose issued Shares are listed on the main board of the
	Stock Exchange (stock code: 1037)
“Completion”	completion of the Proposed Disposal
“Completion Date”	the date falling on the 5th Business Day after all
	Conditions have been fulfilled, in any event, should
	not be later than 155 days from the date of Formal
	Agreement (unless the Vendors and the Purchaser
	mutually agree to postpone the date)
“Conditions”	conditions precedent contained in the Formal Agreement
“Consideration”	the consideration of the Proposed Disposal amounted
	to RMB100,000,000 (equivalent to approximately
	HK$125,703,000)

— 1 —

DEFINITIONS

“Daiwa China”	D a i w a A s s o c i a t e ( C h i n a ) L i m i t e d , a c o m p a n y
	incorporated in the BVI and a wholly owned subsidiary of
	the Company, one of the Vendors
“DAL”	Daiwa Associate Limited, a company incorporated in the
	BVI and a wholly owned subsidiary of the Company, one
	of the Vendors
“Directors”	directors of the Company
“Deposits”	collectively the 1st Deposit and the 2nd Deposit
“DT Shares”	ordinary share of HK$1.00 each in the issued share
	capital of the Target
“Formal Agreement”	the sale and purchase agreement dated 21 August 2014
	and entered into between the Vendors, the Target, the
	Company, the Purchaser and the Subscriber in relation
	to the Proposed Disposal
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Independent Third Party”	any person or company and their respective ultimate
	beneficial owner(s), to the best of the Directors’
	knowledge, information and belief having made all
	reasonable enquiries, are third parties independent of
	the Company and its connected persons
“Industrial Park”	a piece and parcel of land located at Advance New
	Technology Development Zone, Hingye Dadao East Kewu
	Road, South, Heyuan City, Guangdong, the PRC（中國廣
	東省河源市高新技術開發區興業大道東面科五路南邊）with a
	total area of approximately 216,000 square meters and
	together with all the constructions, erections, buildings,
	structures, and certain facilities and improvements
	situated thereon, which are legally and beneficially held
	by the Target
“Latest Practicable Date”	22 September 2014, being the latest practicable date
	prior to the printing of this circular for ascertaining
	certain information for inclusion in this circular

— 2 —

DEFINITIONS

“Lease Agreements”	two or more lease agreements to be entered into
	between the Group and the Target immediately before
	or upon Completion in respect of (1) provision of
	certain properties in the Industrial Park with total area
	of approximately 16,492 square metres with the Group
	for a period of 36-month from the Completion Date
	which is rent free and management fee free; and (2)
	leasing certain part of the Industrial Park at a monthly
	rent of RMB8.5 (equivalent to approximately HK$10.68)
	(including rent and management fee) per square metre
	and to grant an option to the Group which entitling the
	Group to lease additional part of the Industrial Park with
	the same terms and conditions
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange
“Long Stop Date”	the date falling on the 150th day from the date of the
	Formal Agreement (or such later date as the Vendors
	and the Purchaser may agree)
“MOU”	the conditional legally binding memorandum of
	understanding dated 16 May 2014 and entered into
	between the Purchaser and the Vendors in relation to the
	sale and purchase of the Sale Shares and the Sale Loan
“Parties”	the parties to the Formal Agreement which comprise the
	Vendors, the Purchaser, the Subscriber, the Target and
	the Company, Party means any one of them
“PRC”	the People’s Republic of China but excluding, for the
	purposes of this circular, Hong Kong, the Macau Special
	Administrative Region and Taiwan
“Proposed Disposal”	the disposal of the Sale Shares and the Sale Loan
	pursuant to the Formal Agreement
“Purchaser”	Vision Best Holdings Limited, a company incorporated
	under the laws of Hong Kong with limited liability

— 3 —

DEFINITIONS

“Reorganisation”	the reorganisation of the Target and the Target
	Subsidiary prior to the Completion which comprises:
	(1) completion of dissolution of the Target Subsidiary
	or the disposal of all assets in Target Subsidiary to the
	Vendors or their nominee(s) at the price and manner
	as determined by the Vendors; and (2) save for the
	Industrial Park and a vehicle carrying a PRC HK vehicle
	mark which will be transferred back to the Group, all the
	assets of the Target be transferred and assigned to the
	Vendors and/or their nominee(s)
“Sale Loan”	all obligations, indebtedness and liabilities due, owing or
	incurred by the Target to the Vendors as at Completion,
	whether actual, contingent or deferred and irrespective
	of whether or not the same is due and payable
	on Completion, which amounted to approximately
	HK$118,000,000 as at the date of the Formal Agreement
“Sale Shares”	98 DT Shares legally and beneficially owned by the
	Vendors upon completion of the Subscriptions
“Shareholders”	holders of the issued Shares
“Shares”	ordinary shares of HK$0.01 each in the issued share
	capital of the Company
“SFO”	Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong) as amended from time to time
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscriber”	Blue Sky Telecommunication Limited, a company
	incorporated in Hong Kong with limited liability
“Subscriptions”	the subscription for (i) 94 DT Shares by DAL at
	the subscription price of HK$1 each; and (ii) two
	DT Shares by the Subscriber at the subscription
	price of RMB1,000,000 (equivalent to approximately
	HK$1,257,000) each
“Target”	Daiwa Trading (Guangdong) Limited, a company
	incorporated in Hong Kong with limited liability, as at the
	date of Formal Agreement, the Target is wholly owned by
	the Vendors, upon completion of the Subscriptions, the
	Target is owned as to 98% by the Vendors and 2% by
	the Subscriber

— 4 —

DEFINITIONS

“Target Subsidiary” Dongguan Cosmos Electronics Company Limited（東莞環# 宇電子有限公司）, a company established in the PRC, as at the date of Formal Agreement, the Target Subsidiary is wholly owned by the Target and is undergoing the process of voluntary dissolution in the PRC “Valuation Report” the valuation report on the Group’s interest in Industrial Park issued by Roma Appraisals Limited on 24 September 2014 “Vendors” collectively, Advance Creative, DAL and Daiwa China “HK$” Hong Kong dollars, the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “%” per cent.

The English transliteration of the Chinese names in this circular, where indicated, is included for information only, and should not be regarded as the official English names of such Chinese names.

For the purpose of this circular, unless otherwise indicated, conversion of RMB into HK$ is calculated at the approximate exchange rate of RMB1.00 to HK$1.257. This exchange rate is for illustration purpose only and does not constitute a representation that any amounts have been, could have been, or may be exchanged at this or any other rate at all.

— 5 —

LETTER FROM THE BOARD

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DAIWA ASSOCIATE HOLDINGS LIMITED 台和商事控股有限公司 *

(incorporated in Bermuda with limited liability)

(Stock code: 1037)

Executive Directors:

Mr. Lau Tak Wan

• Ms. Chan Yuen Mei, Pinky

Mr. Cheung Wai Ho

• Mr. Chong Wing Kam, James

Registered office:

Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

• Mr. Fung Wai Ching

Independent non-executive Directors:

Dr. Barry John Buttifant

Mr. Choi Yuk Fan

• Dr. Liu Ngai Wing

Principal place of business in Hong Kong:

11/F Block G East Sun Industrial Centre 16 Shing Yip Street Kwun Tong Hong Kong

24 September 2014

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION DISPOSAL OF SUBSIDIARY

INTRODUCTION

The Company announced that on 21 August 2014 (after trading hours of the Stock Exchange), the Vendors, the Target, the Company, the Purchaser and the Subscriber entered into the Formal Agreement in relation to (i) the Subscriptions; and (ii) the transfer of the Sale Shares and the Sale Loan, for the Consideration in cash.

The purposes of this circular are to provide you with: (i) further information regarding the Proposed Disposal, (ii) the financial information of the Group; and (iii) the Valuation Report.

THE AGREEMENT

Date: 21 August 2014

Parties: (1) Advance Creative, DAL and Daiwa China as vendors;

• (2) the Target as issuer;

• For identification purpose only

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LETTER FROM THE BOARD

• (3) the Company as vendors’ guarantor;

• (4) the Purchaser as purchaser; and

• (5) the Subscriber as subscriber and purchaser’s guarantor

As at the date of Formal Agreement, the issued share capital of the Target comprises 4 DT Shares of HK$1 each and is owned as to 25% by Advance Creative, 25% by DAL and 50% by Daiwa China. Immediately following the completion of the Subscriptions, the Target will have 100 DT Shares in issue and will be owned as to 1% by Advance Creative, 95% by DAL, 2% by Daiwa China and 2% by the Subscriber.

The Purchaser is a company incorporated under the laws of Hong Kong with limited liability. The principal activity of the Purchaser is investment holding. The Subscriber is a company incorporated under the laws of Hong Kong with limited liability. The principal activity of the Subscriber is trading of mobile phones and electronic parts. The entire issued share capitals of the Purchaser and the Subscriber are held by Tinno Mobile Technology Corporation (“ Tinno ”), a company incorporated in the PRC with limited liability. As at the Latest Practicable Date, Tinno is owned as to (i) approximately 57.14% by Winsang Technologies Limited (“ Winsang Technologies ”) and (ii) 42.86% by other minority shareholders, none of them holds 30% or more equity interests in Tinno. Winsang Technologies in turn is wholly owned by Mr. Lin Man Hung（林文鴻）. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the Purchaser, the Subscriber, Tinno and their ultimate beneficial owner, is an Independent Third Party.

The Subscriptions

Pursuant to the Formal Agreement, within three Business Days after the signing of the Formal Agreement, DAL shall subscribe for 94 DT Shares at the subscription price of HK$1 each; and the Subscriber shall subscribe for two DT Shares at the subscription price of RMB1,000,000 (equivalent to approximately HK$1,257,000) each.

In the event that Conditions have not been fulfilled on or before the Long Stop Date, at the request of the Subscriber, the Vendors shall and shall procure to buy back the two DT Shares held by the Subscriber at the total purchase price of RMB2,000,000 (equivalent to approximately HK$2,514,000).

Assets to be disposed

Pursuant to the Formal Agreement, the Purchaser has agreed to acquire and the Vendors have agreed to sell (i) the Sale Shares, representing 98% of the entire issued share capital of the Target immediately following the completion of Subscription; and (ii) the Sale Loan, which amounted to approximately HK$118,000,000 as at 30 June 2014.

Upon the Completion, the Company will not hold any interest in the Target, and the Target will cease to be a subsidiary of the Company.

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LETTER FROM THE BOARD

Consideration

The Consideration for the Proposed Disposal payable by the Purchaser to the Vendors for the Sale Shares shall be the aggregate sum of RMB100,000,000 (equivalent to approximately HK$125,703,000). The Consideration shall be satisfied in cash in the following manner:

• (1) as to RMB5,000,000 (equivalent to approximately HK$6,220,000) has been paid by the Purchaser to DAL (for itself and on behalf of other Vendors) as the 1st Deposit and part of payment of the Consideration upon signing of the MOU;

• (2) as to RMB20,000,000 (equivalent to approximately HK$25,193,000) has been paid by the Purchaser to DAL (for itself and on behalf of other Vendors) as the 2nd Deposit and part of payment of the Consideration upon signing of the Formal Agreement; and

• (3) the balance of Consideration, which is equal to RMB75,000,000 (equivalent to approximately HK$94,290,000), shall be payable by the Purchaser to DAL (for itself and on behalf of other Vendors) upon Completion.

The Consideration was arrived at after arm’s length negotiations between the Vendors and the Purchaser and was determined with reference to (i) the value of the Industrial Park; (ii) the value of Sale Loan; and (iii) the net assets of the Target amounting to approximately HK$91,899,000 as shown in the unaudited management accounts of the Target as at 30 June 2014.

Refund of Deposits

• (a) If the Conditions cannot be fulfilled by the Long Stop Date and none of the Purchaser and the Vendors have been in default, the Vendors shall refund the Deposit (for that portion of Deposits which has been paid and without interest) within five Business Days upon receipt of written notice from the Purchaser and the Formal Agreement shall cease to be effective.

• (b) Subject to paragraph (h) below, if the Conditions cannot be fulfilled by the Long Stop Date due to the default of the Purchaser, the Vendors shall be entitled to forfeit the Deposits (for that portion of Deposits which has been paid) and the Formal Agreement shall cease to be effective.

• (c) Subject to paragraph (g) below, if the Conditions cannot be fulfilled by the Long Stop Date due to the default of the Vendors, the Vendors shall refund the Deposits (for that portion of Deposits which has been paid and without interest) together with a sum equivalent to the Deposits (for that portion of Deposits which has been paid) as compensation to the Purchaser within five Business Days thereafter and the Formal Agreement shall cease to be effective.

• (d) Subject to paragraph (h) below, if the Conditions have been fulfilled, but Completion does not take place on the Completion Date due to the default of the Purchaser, the Vendors shall entitle to forfeit the Deposits (for that portion of Deposits which has been paid) and the Formal Agreement shall cease to be effective.

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LETTER FROM THE BOARD

• (e) Subject to paragraph (g) below, if the Conditions have been fulfilled, but Completion does not take place on the Completion Date due to the default of the Vendors, the Vendors shall refund the Deposits (for that portion of Deposits which has been paid and without interest) together with a sum equivalent to the Deposits (for that portion of Deposits which has been paid) as compensation to the Purchaser within five Business Days thereafter and the Formal Agreement shall cease to be effective.

• (f) In the event that Completion does not take place on or before 90 days from the date of the payment of 2nd Deposit by the Purchaser to the Vendors (i.e. the date of the Formal Agreement), the Vendors shall pay the Purchaser the interest in respect of the Deposits received at the interest rate of 3% per annum which will be accrued thereon from the 91st day of the Formal Agreement until the 150th day of the Formal Agreement.

• (g) In the event that the Conditions have not been fulfillment on or before the Long Stop Date or Completion does not take place on the Completion Date due to the default of the Vendors,

• i. the Purchaser may elect to terminate the Formal Agreement and the Vendors shall refund the Deposits in accordance to paragraphs (c) and (e) above; or

• ii. if the Purchaser and the Vendor mutually agree to postpone the Completion Date to a final completion date (the “ Final Completion Date ”), the Vendor shall pay the Purchaser,

  1. the interest in respect of the Deposits received at the interest rate of 6% per annum which will be accrued thereon from the 151st day of the Formal Agreement until the Final Completion Date; and

  2. all the obligations and liabilities of the Vendors to buyback the two DT Shares held by the Subscriber and under paragraphs (c) and (e) above shall be suspended until the Final Completion Date and if the Final Completion Date would have been lapsed and Completion does not take place, the Vendors shall deal with the Deposits in accordance with paragraphs (c) and (e) above.

• (h) In the event that the Conditions have not been fulfillment or Completion does not take place on the Completion Date due to the default of the Purchaser,

• i. the Vendors may elect to terminate the Formal Agreement and the Vendors shall entitled to forfeit the Deposits in accordance to paragraphs (b) and (d) above; or

• ii. if the Purchaser and the Vendor mutually agree to postpone the Completion Date to the Final Completion Date, all the rights and interest of the Vendors under paragraphs (b) and (d) above shall be suspended until the Final Completion Date and if the Final Completion Date would have been lapsed and Completion does not take place, the Vendors shall deal with the Deposits in accordance with paragraphs (b) and (d) above.

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LETTER FROM THE BOARD

Conditions precedent

Completion of the Proposed Disposal will be conditional upon, inter alia, the followings:

• (i) completion of the Reorganisation;

• (ii) the passing by the Shareholders at a special general meeting or in writing (in lieu of holding a general meeting) of an ordinary resolution to approve the Formal Agreement and the transactions contemplated hereunder;

• (iii) completion of the subscription for the two DT Shares by the Subscriber; and

• (iv) any other action or issue of documents as required under the Listing Rules or codes, regulations or laws of Hong Kong.

Save for conditions (ii) and (iv) above which are incapable of being waived, the Purchaser may at its discretion at any time waive one or more of the above condition(s).

Leasing arrangement after Completion

Pursuant to the Formal Agreement, upon Completion, the Purchaser shall procure the Target:

• (a) to continue the performance of existing four tenancy agreements in respect of certain properties located in the Industrial Park with total area of approximately 10,876 square metres leased out to Independent Third Parties;

• (b) to enter into the Lease Agreements in respect of:

• (1) provision of certain properties in the Industrial Park with a total area of approximately 16,492 square metres to the Group for a period of 36-month from the Completion Date which is rent free and management fee free; and

• (2) leasing certain part of the Industrial Park (save for the rental areas stipulated in (a) and (b)(1) above) at a monthly rent of RMB8.5 (equivalent to approximately HK$10.68) (including rent and management fee) per square metre and to grant an option to the Group which entitling the Group to lease additional part of the Industrial Park with the same terms and conditions.

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LETTER FROM THE BOARD

Completion

Completion shall take place on the fifth Business Day after fulfillment or waiver (as the case may be) of the Conditions or on such other date as agreed among the parties to the Formal Agreement in writing.

Upon Completion, the Target will cease to be a subsidiary of the Company.

The guarantees

The Company unconditionally and irrevocably undertakes to the Purchaser to guarantee the undisclosed financial liability and legal liability of the Target before Completion and to procure the due and punctual performance by the Vendors of all their obligations expressed to be imposed on or assumed by them under the Formal Agreement.

The Subscriber unconditionally and irrevocably undertakes to the Vendors to guarantee the financial liability and legal liability of the Purchaser and to procure the due and punctual performance by the Purchaser of all its obligations expressed to be imposed on or assumed by it under the Formal Agreement and the Lease Agreement.

BACKGROUND INFORMATION ON THE TARGET

The Target is a company incorporated in Hong Kong which principal business is investment holding. As at the Latest Practicable Date, the major asset of the Target is the Industrial Park. The Target is also a holding company of the Target Subsidiary which is in the process of voluntary dissolution in the PRC.

The Industrial Park

As mentioned above, the major asset of the Target is the Industrial Park, which is a piece and parcel of land located at Advance New Technology Development Zone, Hingye Dadao East Kewu Road, South, Heyuan City, Guangdong, the PRC（中國廣東省河源市高 新技術開發區興業大道東面科五路南邊）with a total area of approximately 216,000 square meters, and together with all the constructions, erections, buildings, structures and certain facilities and improvements situated thereon, which are legally and beneficially held by the Company as at the date of the Formal Agreement. As at the Latest Practicable Date, the Industrial Park is used by the Group for manufacturing process. Part of the Industrial Park is expected to be rented by the Group for the same purpose after Completion.

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LETTER FROM THE BOARD

The following is a summary of the financial information of the Target based on (i) the audited financial information for the year ended 31 March 2013; and (ii) the audited financial information for the year ended 31 March 2014, prepared in accordance with Hong Kong Financial Reporting Standards:

	As at	As at
	31 March 2013	31 March 2014
	(audited)	(audited)
	HK$’000	HK$’000
Net (Liabilities)/Assets	(36,663)	92,461
	For the	For the
	year ended	year ended
	31 March 2013	31 March 2014
	(audited)	(audited)
	HK$’000	HK$’000
Profit/ (Loss) before tax	3,068	(160)
Profit/ (Loss) for the year	3,068	(160)

During the year ended 31 March 2014, the amount due to DAL was re-designated as a shareholder’s loan with no fixed term of repayment as mutually agreed by the Target and DAL. Consequently, the shareholder’s loan from DAL of HK$129,284,000 as at 31 March 2014 was classified within equity and such has resulted in the Target’s position of net assets as at 31 March 2014, as compared to that of net liabilities as at 31 March 2013.

The unaudited total assets of the Target as at 30 June 2014 were approximately HK$92,351,000.

The audited net assets as at 31 March 2014 except a bank balance of approximately HK$55,000 and the unaudited total asset value as at 30 June 2014 of the Target disclosed above do not include the values of assets to be transferred and assigned to the Vendors under the Reorganisation.

REASON FOR AND BENEFITS OF THE PROPOSED DISPOSAL

The Group is principally engaged in the distribution of electronic components, distribution of personal computer products and manufacturing of electronic products.

The Target mainly holds the Industrial Park at Heyuan, Guangdong Province, the PRC. As the Group discontinued the business of manufacturing of consumer electronics during the financial year ended 31 March 2013, large portion of the Industrial Park was not utilized. The production activities of the remaining manufacturing business is steady, therefore the utilization of that Industrial Park remains at low level. On the other hand, the Group needs to pay substantial maintenance expenses and statute taxes every year for the Industrial Park. The maintenance expenses and statute taxes incurred for the two years ended 31 March 2013 and 2014 were approximately HK$2,550,000 and HK$2,920,000 respectively. The Directors consider that the Proposed Disposal represents a good opportunity to realize the Company’s investment, release a significant funding tied, and save future expenses.

In view of the above, the Directors consider that the terms and conditions of the Formal Agreement are fair and reasonable and are in the interests of the Shareholders.

— 12 —

LETTER FROM THE BOARD

INTENDED USE OF PROCEEDS FROM DISPOSAL

The estimated net proceeds from the Proposed Disposal, after deducting expenses attributable to the Proposed Disposal, will be approximately HK$125 million. Such net proceeds are expected to be used as the general working capital of the Group.

FINANCIAL EFFECTS OF THE PROPOSED DISPOSAL

Upon Completion, the Target will cease to be the subsidiary of the Company. As a result, the financials of the Target will be excluded from the financial statement of the Group subsequent to the Completion. The Group expects to record an unaudited gain before taxation from the Proposed Disposal of approximately HK$33 million, which is calculated by reference to, (i) the net proceeds from the Proposed Disposal of approximately HK$125 million; and (ii) the net asset value of the Target as at 30 June 2014 of approximately HK$92 million. The Group expects that the total lease expenses for additional part of the Industrial Park for the 12 month period from Completion will be approximately HK$660,000.

Shareholders should note that the actual gain from the Proposed Disposal will be calculated on the basis of the relevant figures as at the Completion Date and subject to audit and therefore would be different from the aforesaid amount.

It is expected upon completion of the Disposal that the total assets of the Group will be increased by approximately HK$33 million and the total liabilities of the Group will be decreased by approximately HK$0.4 million.

BUSINESSES OF THE REMAINING GROUP

The Group is principally engaged in the electronic components distribution, distribution of personal computer products and manufacturing of electronic products. Following the Proposed Disposal, the Group will continue to engage in its current business.

LISTING RULES IMPLICATIONS

As the applicable ratio of the Proposed Disposal under Rule 14.07 of the Listing Rules exceeds 25% but less than 75%, the Proposed Disposal constitutes a major transaction on the part of the Company and is therefore subject to the reporting, announcement and the shareholders’ approval requirements under Chapter 14 of the Listing Rules.

As no Shareholder has a material interest in the Proposed Disposal, none of the Shareholders is required to abstain from voting if the Company were to convene a general meeting for the approval of the Proposed Disposal.

— 13 —

LETTER FROM THE BOARD

Pursuant to Rule 14.44 of the Listing Rules, written shareholders’ approval is accepted for the Proposed Disposal in lieu of holding a general meeting of the Company. Mr. Lau Tak Wan, the executive Director and the controlling Shareholder, and his associates who are beneficially interested in 241,221,529 Shares, representing approximately 55.17% of the issued share capital of the Company as at the Latest Practicable Date, have given their written approval for the Proposed Disposal. Accordingly, such written approval will be accepted in writing in lieu of a general meeting to approve the Proposed Disposal. Therefore, no general meeting will be held to approve the Proposed Disposal. This circular is dispatched to the Shareholders for their information only.

FURTHER INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

By order of the Board Daiwa Associate Holdings Limited Lau Tak Wan President

— 14 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIx I

1. INDEBTEDNESS STATEMENT

Borrowings

As at the close of business on 31 July 2014, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had outstanding borrowings of approximately HK$103,060,000, details of which are set out as follows:

Trust receipts bank loans Short-term bank borrowings Other bank borrowings Bank overdrafts Total	HK$’000 70,189 5,000 25,789 2,082
	103,060

As at 31 July 2014, except for a bank borrowing amounting to approximately HK$12,645,000 secured by certain available-for-sale financial assets, all borrowings are unsecured.

Contingent liabilities

As at the close of business on 31 July 2014, the Group did not have any significant contingent liabilities.

Save as aforesaid, at the close of business on 31 July 2014, the Group did not have any outstanding loan capital, bank overdrafts, loans, mortgages, charges or other similar indebtedness, or hire purchase of finance lease commitments, liabilities under acceptances or acceptance credits, guarantees or other material contingent liabilities.

2. WORKING CAPITAL

The Directors are of the opinion that, after taking into account the present available financial resources, the banking facilities presently available and the estimated net proceeds from the Disposal, the Group will have sufficient working capital for its business for the next twelve months from the date of this circular in the absence of unforeseen circumstances.

3. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 March 2014 (being the date to which the latest published audited consolidated financial statements of the Group were made up).

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FINANCIAL INFORMATION OF THE GROUP

APPENDIx I

4. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group is principally engaged in the electronic components distribution, electronic products manufacturing, and personal computer products distribution. The Group will continue to operate in these business and will develop product lines of low risk and higher gross margin business with consistent demands.

For the financial year ended 31 March 2014, the audited consolidated turnover of the Group was HK$618.3 million (2013: HK$547.9 million). The gross profit was HK$87.8 million (2013: HK$68.7 million). The net profit was HK$8.3 million (2013: loss HK$170.7 million).

In the segment of Electronic Components Distribution, the Group will focus on the development of new products markets and establishment of new distributorship from new principal suppliers. In addition to the existing product lines, the segment will also target the markets of optical electronics, illuminations and power management devices which are expected to have active growth in the coming years.

Business in the personal computer business is experiencing growth in the mass merchants market. The Group keeps sourcing to act as authorized distributor of new brands and suppliers. With the daily increase in demand from mega stores, this segment will build up sourcing points in Mainland China to procure more varieties of products with good quality and pricing. The Group will continue to diversify the personal computer distribution business to further penetrate into the field of tablet computers and smart phone accessories. The consolidation of the number of competitors in the market will provide good opportunity for growth of the segment.

In Electronics Products Manufacturing segment, the Group is developing new products with niche technologies. As both labor cost and administrative cost are increasing substantially in the PRC, the Group will improve the production process, inventory control, logistics and management system by applying new semi-automatic machines, new equipment and new ERP software system.

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VALUATION REPORT ON THE GROUP’S INTEREST IN THE INDUSTRIAL PARK

APPENDIx II

The following is the text of a letter and valuation report, prepared for the purpose of incorporation in this circular received from Roma Appraisals Limited, an independent valuer, in connection with its valuations as at 31 July 2014 of the Group’s interests in the Industrial Park.

==> picture [99 x 57] intentionally omitted <==

Unit 3806, 38/F, China Resources Building, 26 Harbour Road, Wan Chai, Hong Kong Tel (852) 2529 6878 Fax (852) 2529 6806 E-mail info@romagroup.com http:// www.romagroup.com

24 September 2014

Daiwa Associate Holdings Limited

11/F., Block G, East Sun Industrial Centre, 16 Shing Yip Street, Kwun Tong, Hong Kong

Dear Sir/Madam,

Re: Property Valuation of an Industrial Complex located at Advance New Technology Development Zone, Hingye Dadao East, Kewu Road South, Heyuan City, Guangdong Province, the People’s Republic of China

In accordance with your instructions for us to value the property held by Daiwa Associate Holdings Limited (the “Company”), its subsidiaries and/or associate companies (hereinafter together referred to as the “Group”) located in the People’s Republic of China (the “PRC”), we confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the property as at 31 July 2014 (the “Date of Valuation”) for the purpose of incorporation in the circular of the Company dated 24 September 2014.

1. BASIS OF VALUATION

Our valuation of the property is our opinion of the market value of the concerned property which we would define as intended to mean “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

Market value is understood as the value of an asset or liability estimated without regard to costs of sale or purchase (or transaction) and without offset for any associated taxes or potential taxes.

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VALUATION REPORT ON THE GROUP’S INTEREST IN THE INDUSTRIAL PARK

APPENDIx II

2. VALUATION METHODOLOGY

Due to the specific purpose for which most of the buildings and structures of the property have been constructed, there are no readily identifiable market comparables. Thus the buildings and structures have been valued on the basis of its depreciated replacement costs instead of direct comparison method. The depreciated replacement cost approach (“DRC”) is based on an estimate of the Market Value for the existing use of the land, plus the current cost of replacement of the existing structures less deductions for physical deterioration and all relevant forms of obsolescence and optimization. In practice, Depreciated Replacement Cost approach may be used as a substitute for the Market Value of specialized property only, due to the lack of market comparables available. Our valuation does not necessarily represent the amount that might be realized from the disposition of the property and the DRC is subject to adequate profitability of the concerned business.

3. TITLE INVESTIGATION

For the property in the PRC, we have been provided with copies of extracts of title documents relating to the property in the PRC. However, we have not searched the original documents to ascertain the existence of any amendments which do not appear on the copies handed to us. We have relied to a very considerable extent on information given by the Group and the Group’s PRC legal advisor, Jian Da Law Firm regarding the title to the property in the PRC. All documents have been used for reference only.

In valuing the property, we have relied on the advice given by the Group that the Group has valid and enforceable title to the property which are freely transferable, and has free and uninterrupted right to use the same, for the whole of the unexpired term granted subject to the payment of annual government rent/land use fees and all requisite land premium/purchase consideration payable have been fully settled.

4. VALUATION ASSUMPTIONS

Our valuation has been made on the assumption that the owner sells the property in the market in its existing state without the benefit of deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements which would serve to affect the value of such property.

In addition, no account has been taken of any option or right of pre-emption concerning or affecting the sale of the property and no allowance has been made for the property to be sold in one lot or to a single purchaser.

5. SOURCE OF INFORMATION

In the course of our valuation, we have relied to a very considerable extent on the information provided by the Group and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, identification of property, particulars of occupation, site and floor areas, ages of buildings and all other relevant matters which can affect the value of the property. All documents have been used for reference only.

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VALUATION REPORT ON THE GROUP’S INTEREST IN THE INDUSTRIAL PARK

APPENDIx II

We have no reason to doubt the truth and accuracy of the information provided to us. We have also been advised that no material facts have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view, and have no reason to suspect that any material information has been withheld.

6. VALUATION CONSIDERATION

We have inspected the exterior and, where possible, the interior of certain property. No structural survey has been made in respect of the property. However, in the course of our inspections, we did not note any serious defects. We are not, however, able to report that the property is free from rot, infestation or any other structural defects. No tests were carried out on any of the building services.

We have not carried out on-site measurement to verify the site and floor areas of the property under consideration but we have assumed that the site and floor areas shown on the documents handed to us are correct. Except as otherwise stated, all dimensions, measurements and areas included in the valuation certificate are based on information contained in the documents provided to us by the Group and are therefore approximations.

No allowance has been made in our valuation for any charges, mortgages or amounts owing on the property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value.

In valuing the property, we have complied with the HKIS Valuation Standards (2012 Edition) published by The Hong Kong Institute of Surveyors and Chapter 5 and Practice Note 12 to the Rules Governing the Listing of Securities issued by the Stock Exchange of Hong Kong Limited.

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VALUATION REPORT ON THE GROUP’S INTEREST IN THE INDUSTRIAL PARK

APPENDIx II

7. REMARKS

Unless otherwise stated, all monetary amounts stated in our valuation are in Renminbi (“RMB”).

Our Valuation Certificate is attached.

Yours faithfully, For and on behalf of Roma Appraisals Limited

Dr. Alan W K Lee

BCom(Property)MFin PhD(BA) MHKIS RPS(GP) AAPI CPV CPV(Business) Associate Director

Note: Dr. Alan W K Lee is a Registered Professional Surveyor (General Practice), a member of Hong Kong Institute of Surveyors and an Associate of Australian Property Institute. He has over 10 years’ valuation experience in Hong Kong, Macau, the PRC, the Asia Pacific Region and European countries.

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VALUATION REPORT ON THE GROUP’S INTEREST IN THE INDUSTRIAL PARK

APPENDIx II

VALUATION CERTIFICATE

Property held and occupied by the Group in the PRC

Property

Description and Tenure

Particulars of Occupancy

Market Value in Existing State as at 31 July 2014

An Industrial Complex located at Advance New Technology Development Zone, Hingye Dadao East, Kewu Road South, Heyuan City, Guangdong Province, The PRC

中國廣東省河源市 高新技術開發區 興業大道東面 科五路南邊的 一個工廠區

The property comprises 5 parcels of land with a total site area of about 216,045.20 sq.m. and various buildings and ancillary structures erected thereon, which were completed in about 2007.

The property has a total gross floor area (“GFA”) of approximately 74,139.97 sq.m..

The land use rights of the property have been granted for a term of 50 years with the earliest expiring on 6 July 2055. For details, please refer to Note 1.

The property is occupied by the Group for industrial use.

RMB98,200,000.

Notes:

1. Pursuant to 5 State-owned Land Use Rights Certificates （國有土地使用證）, the land use rights of the property with a total site area of 216,045.20 sq.m. have been granted to Daiwa Trading (Guangdong) Limited （台和貿易（廣東）有限公 司） for a term of 50 years for industrial use. Details are as follows:

No. 1. 2. 3. 4. 5.	Certificate No. He Guo Yong (2009)Di No.000230 He Guo Yong (2005)Di No.1296 He Guo Yong (2008)Di No.000757 He Guo Yong (2008)Di No.000758 He Guo Yong (2008)Di No.000759 Total:	Gross Floor Area 54,262.00 sq.m. 37,080.60 sq.m. 50,479.10 sq.m. 42,612.70 sq.m. 31,610.80 sq.m. 216,045.20 sq.m.	Expiry Date
			6 July 2055 6 July 2055 28 June 2057 28 June 2057 28 June 2057

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VALUATION REPORT ON THE GROUP’S INTEREST IN THE INDUSTRIAL PARK

APPENDIx II

1. Pursuant to 15 Building Ownership Certificates （房屋所有權證）, the property with a total GFA of 74,139.97 sq.m. is legally held by Daiwa Trading (Guangdong) Limited （台和貿易（廣東）有限公司）. Details of which are as follows:

No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.	Certificate No. Yue Fang Di Zheng Zi Di No.C4980620 Yue Fang Di Zheng Zi Di No.C4980621 Yue Fang Di Zheng Zi Di No.C5366412 Yue Fang Di Zheng Zi Di No.C5366411 Yue Fang Di Quan Zheng He Zi Di No.1700003260 Yue Fang Di Quan Zheng He Zi Di No.1700003263 Yue Fang Di Quan Zheng He Zi Di No.1700003250 Yue Fang Di Quan Zheng He Zi Di No.1700003238 Yue Fang Di Quan Zheng He Zi Di No.1700003245 Yue Fang Di Quan Zheng He Zi Di No.1700003251 Yue Fang Di Quan Zheng He Zi Di No.1700003253 Yue Fang Di Quan Zheng He Zi Di No.1700003256 Yue Fang Di Quan Zheng He Zi Di No.0100034950 Yue Fang Di Quan Zheng He Zi Di No.0100034959 Yue Fang Di Quan Zheng He Zi Di No.0100034966 Total:	Gross Floor Area 3,618.56 sq.m. 3,618.56 sq.m. 4,409.34 sq.m. 4,409.34 sq.m. 10,938.67 sq.m. 10,938.67 sq.m. 2,338.80 sq.m. 3,718.04 sq.m. 3,718.04 sq.m. 3,718.04 sq.m. 3,718.04 sq.m. 3,718.04 sq.m. 5,092.61 sq.m. 5,092.61 sq.m. 5,092.61 sq.m. 74,139.97 sq.m.	Expiry Date
			6 July 2055 6 July 2055 6 July 2055 6 July 2055 28 June 2057 28 June 2057 28 June 2057 28 June 2057 28 June 2057 28 June 2057 28 June 2057 28 June 2057 6 July 2055 6 July 2055 28 June 2057

1. Our inspection was performed by Mr. Zhong Hui Ping with over 10 years’ valuation experience, in September 2014.

2. We have been provided with a legal opinion on the title to the property issued by the Group’s legal advisers, which contains, inter alia, the following information:

3. a. The ownership of the property is legal and valid;

4. b. The property conforms the usage stipulated in the Land Use Rights Grant Contract;

5. c. The property can be occupied and used by Daiwa Trading (Guangdong) Limited （台和貿易（廣東）有限公司） and

6. d. The land use rights of the property can be leased and mortgaged upon relevant regulation.

7. As advised by the Group, Daiwa Trading (Guangdong) Limited （台和貿易（廣東）有限公司） is a wholly-owned subsidiary of the Company.

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GENERAL INFORMATION

APPENDIx III

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests and short positions in the securities of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of the Part XV of the SFO) (i) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules, were as follows:

(a) Long positions in the Shares

Name of Directors Mr. Lau Tak Wan (“Mr. Lau”) Ms. Chan Yuen Mei, Pinky (“Ms. Chan”) Mr. Cheung Wai Ho	Number of issued ordinary shares/underlying shares attached to derivatives Ordinary shares in issued
	Personal interests Corporate interests Other interests Total interests Approximate percentage 29,696,426 (Note 1) 210,096,536 (Note 2 & 3) 1,428,567 241,221,529 55.17% 5,053,567 (Note 1) 210,096,536 (Note 2 & 3) 26,071,426 241,221,529 55.17% 57,033 — — 57,033 0.013%

Notes:

1. 3,625,000 Shares were jointly held by Mr. Lau and Ms. Chan (the spouse of Mr. Lau).

2. 133,948,541 Shares were beneficially owned by China Capital Holdings Investment Ltd. (“ China Capital ”). The issued share capital of China Capital is 60% owned by Mr. Lau and 40% owned by Ms. Chan.

3. 76,147,995 Shares were beneficially owned by Leading Trade Ltd. (“ Leading Trade ”). The issued share capital of Leading Trade is 50% owned by Mr. Lau and 50% owned by Ms. Chan.

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GENERAL INFORMATION

APPENDIx III

(b) Long position in shares of associated corporations of the Company

Dominion International Limited, which is 50% owned by Mr. Lau, and 50% owned by Ms. Chan, holds the following interests in share of associated corporations of the Company:

	Number of
	non-voting
	deferred shares
	held
Cosmos Wires and Connectors Manufacturing Limited	50,000
Westpac Digital Limited	1
Vastpoint Industrial Limited	455,500
Daiwa Associate (H.K.) Limited	1,500,000

In addition, each of Mr. Lau and Ms. Chan beneficially owns 140,000 and 10,000 non-voting deferred shares respectively in Cosmotec Precision Industrial Limited.

Save as disclosed herein, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had or was deemed to have any interests or short positions in the shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) (i) where were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules.

(b) Persons who have an interest or short position which is discloseable under Divisions 2 and 3 of Part xV of the SFO and substantial Shareholders

So far as is known to the Directors and the chief executive of the Company, as at the Latest Practicable Date, the following persons (not being Directors or chief executive of the Company) had, or were deemed to have, interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or who were directly or indirectly interested in 10% or more of the nominal value

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GENERAL INFORMATION

APPENDIx III

of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group:

Long Position in the Shares

			Approximate
			percentage or
	Number or		attributable
	attributable	Nature of	percentage of
	number of	interests	shareholding
Name of Shareholder	Shares held		(%)
China Capital_(Note 1)_	133,948,541	Beneficial	30.64%
		interests
Leading Trade_(Note 2)_	76,147,995	Beneficial	17.42%
		interests
Mr. Ng Hung Sang	42,058,698	Beneficial	9.62%
		interests
Ms. Ng Lai King Pamela	42,058,698	Beneficial	9.62%
(spouse of Mr. Ng Hung		interests
Sang)

Notes:

1. 133,948,541 Shares were beneficially owned by China Capital Holdings Investment Ltd. (“ China Capital The issued share capital of China Capital is 60% owned by Mr. Lau and 40% owned by Ms. Chan.

2. 76,147,995 Shares were beneficially owned by Leading Trade Ltd. (“ Leading Trade ”). The issued share capital of Leading Trade is 50% owned by Mr. Lau and 50% owned by Ms. Chan.

Save as disclosed above, as at the Latest Practicable Date, the Directors and the chief executive of the Company were not aware of any other person (other than the Directors and the chief executive of the Company) who had, or was deemed to have, interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group.

3. DIRECTORS’ SERVICE CONTRACTS

Each of the executive directors has entered into service contracts with the Company and these services contracts will continue thereafter until terminated by either party for not less than three or six months’ prior written notice.

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

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GENERAL INFORMATION

APPENDIx III

4. ExPERT AND CONSENT

The following are the qualifications of the experts who have given opinions or advice which are contained in this circular:

Name

Qualification

Roma Appraisals Limited (the “ Valuer ”)

Independent property valuer

As at the Latest Practicable Date, the Valuer has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter(s) and report(s) and references to its names in the form and context in which they respectively appear.

As at the Latest Practicable Date, the Valuer did not have any interest in the share capital of any member of the Group nor any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

5. LITIGATION

On or about 30 August 2013, AI-Daiwa Ltd., a subsidiary of the Company has commenced an action at the district court of the Northern District of California in the United States against a third party customer (the “ Defendant ”) for overdue trading debts, unpaid finished goods, goods in progress, raw material inventory dedicated for the Defendant’s requested project and materials ordered from vendors in reliance on the Defendant’s purchase orders. The Group sought, among other things, (i) for payment of not less than US$443,622.76 for goods received; and (ii) for payment of not less than US$5,644,239.62 for materials purchased and prepared in reliance of purchaser orders placed by the Defendant. As at the Latest Practicable Date, the litigation with the Defendant was still in progress. Impairment for the relevant overdue trading debts and inventories had been made and disclosed in the annual report for the year ended 31 March 2013.

Save as disclosed above, as at the Latest Practicable Date, neither the Company nor any of its subsidiaries were engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance was known to the Directors to be pending or threatened by or against the Company or any of its subsidiaries.

6. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors nor their respective associates had any business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

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GENERAL INFORMATION

APPENDIx III

7. DIRECTORS’ AND ExPERT’S INTERESTS IN ASSETS/CONTRACTS AND OTHER INTERESTS

• (a) As at the Latest Practicable Date, none of the Directors and the Valuer had any direct or indirect interests in any asset which had been acquired, or disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group since 31 March 2014, the date to which the latest published audited financial statements of the Group were made up.

• (b) As at the Latest Practicable Date, none of the Directors and the Valuer was materially interested, directly or indirectly, in any contract or arrangement entered into by any member of the Group.

8. MATERIAL CONTRACTS

The following contracts (not being contracts in the ordinary course of business) have been entered into by the members of the Group within the two years immediately preceding the date of this circular and are or may be material:

• (a) the Formal Agreement;

• (b) the MOU;

• (c) the placing agreement dated 27 August 2013 and entered into between Kingston Securities Limited as placing agent and the Company in relation to the placing of 43,000,000 Shares by the Company; and

• (d) the sale and purchase agreement dated 23 November 2012 and entered into between Protech Century Limited as purchaser, Daiwa Distribution Holdings Limited as vendor, the Company and Mr. Sham Ka Hung as guarantor for the disposal of the entire equity interests in each of (i) Daiwa Distribution Limited, (ii) Daiwa Resources Limited and (iii) Daiwa Electronic Limited for a total consideration of HK$67,287,724 (subject to adjustment).

9. MISCELLANEOUS

• (a) The registered office the Company is located at Canon Court, 22 Victoria Street, Hamilton HM 12, Bermuda and the head office and principal office of business in Hong Kong is at 11th Floor, Block G, East Sun Industrial Centre, 16 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong.

• (b) The branch share registrar and transfer office of the Company in Hong Kong is Tricor Abacus Ltd. at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

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GENERAL INFORMATION

APPENDIx III

• (c) The company secretary of the Company is Mr. Man Wai Chuen (“ Mr. Man ”). Mr. Man is a fellow member of both the Association of Chartered Certified Accountants and the Hong Kong Institute of Chartered Secretaries. Mr. Man is also an associate member of the Hong Kong Institute of Certified Public Accountants.

• (d) The English text of this circular shall prevail over the Chinese text.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours (Saturdays and public holidays excepted) at the head office of the Company at 11th Floor, Block G, East Sun Industrial Centre, 16 Shing Yip Street, Kwun Tong, Hong Kong from the date of this circular up to and including 8 October 2014:

• (a) the memorandum and articles of association of the Company;

• (b) the service contracts referred to in the paragraph headed “Directors’ service contracts” in this Appendix;

• (c) the material contracts referred to in the paragraph headed “Material contracts” in this Appendix;

• (d) the Valuation Report, the text of which is set out on pages 17 to 22 in this circular;

• (e) the written consent of the expert referred to in the paragraph headed “Expert and consent” in this Appendix;

• (f) the annual reports of the Company and its subsidiaries for the two financial years ended 31 March 2013 and 31 March 2014;

• (g) the interim report of the Company and its subsidiaries for the six months ended 30 September 2013; and

• (h) this circular.

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